Correlation Between Narae Nanotech and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and SEOJEON ELECTRIC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Narae Nanotech and SEOJEON ELECTRIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Narae Nanotech Corp and SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Narae Nanotech and SEOJEON ELECTRIC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Narae Nanotech with a short position of SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and SEOJEON ELECTRIC.
Diversification Opportunities for Narae Nanotech and SEOJEON ELECTRIC
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Narae and SEOJEON is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC and Narae Nanotech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Narae Nanotech Corp are associated (or correlated) with SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Narae Nanotech and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to generate 1.31 times more return on investment than SEOJEON ELECTRIC. However, Narae Nanotech is 1.31 times more volatile than SEOJEON ELECTRIC MACHINERY. It trades about 0.27 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.1 per unit of risk. If you would invest 316,000 in Narae Nanotech Corp on October 7, 2024 and sell it today you would earn a total of 85,500 from holding Narae Nanotech Corp or generate 27.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Narae Nanotech Corp vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Narae Nanotech Corp |
| SEOJEON ELECTRIC MAC |
Narae Nanotech and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Narae Nanotech and SEOJEON ELECTRIC
The main advantage of trading using opposite Narae Nanotech and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, SEOJEON ELECTRIC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Narae Nanotech vs. Daishin Information Communications | Narae Nanotech vs. Digital Power Communications | Narae Nanotech vs. Hotel Shilla Co | Narae Nanotech vs. Korea Information Communications |
| SEOJEON ELECTRIC vs. Woori Financial Group | SEOJEON ELECTRIC vs. Jb Financial | SEOJEON ELECTRIC vs. Nh Investment And | SEOJEON ELECTRIC vs. Hyundai Heavy Industries |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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